EMPLOYMENT AGREEMENT
AGREEMENT dated as
of the 1st day of April 2005 by and between XXX X’XXXXX (USA) LLC, an Illinois
limited liability company with its principal office at 000 Xxxxxx Xxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxx 00000 (the “Company”), and
XXXXXXX XXXXX, with an address at 000 X. Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000 (the “Employee”).
W
I T N E S S E T H :
WHEREAS, WAKO
Logistics Group, Inc. (The “Parent
Company”)
desires to purchase all of the issued and outstanding limited liability company
membership interests of the Company, pursuant to the terms and conditions of a
Membership Interest Purchase Agreement dated as of March 22, 2005 (the
“Acquisition
Agreement”), and
to continue the business of the Company after such acquisition (the
“Acquisition”);
and
WHEREAS,
the
Employee, prior to the Acquisition, was employed as the Executive Vice President
of the Company; and
WHEREAS, the
Acquisition Agreement provides for the Company’s continued employment of the
Employee, and the entering into of this Employment Agreement by the Company and
the Employee, as one of the conditions for the consummation of the Acquisition;
and
WHEREAS, the
Company desires to employ the services of the Employee and the Employee desires
to provide his services to the Company and to accept employment by the Company
on the terms and conditions hereinafter set forth;
NOW,
THEREFORE, in
consideration of the mutual promises set forth in this Agreement, the parties
agree as follows:
1. Employment
and Duties.
(a) Employment;
Duties. Subject
to the terms and conditions hereinafter set forth, the Company hereby employs
the Employee as the Company’s Chief Executive Officer, and the Employee shall
have such duties and responsibilities assigned to him by the President of the
Parent Company, and which are consistent with said position including, without
limitation,
those
duties and responsibilities currently performed by the Employee. During the Term
(as such term is defined hereafter), the Employee shall report to the Parent
Company’s President, and Employee shall perform such other duties and
responsibilities in accordance with the President’s instructions,
which shall be consistent with his position as the Chief Executive Officer of
the Company.
(b) Term. Unless
terminated earlier as provided for in Section
6 of this
Agreement, this Agreement shall continue in effect until either party provides
the other with at least twelve (12) months prior written notice of the
termination of this Agreement (the “Term”).
2. Service
on the Board of Managers. During
the Term, unless otherwise mutually agreed to by the Company and the Employee,
the Employee shall serve as a manager on the Company’s Board of
Managers.
3. Employee’s
Performance.
Employee hereby accepts the employment contemplated by this Agreement. During
the Term, Employee shall devote all of his business time and efforts to the
performance of his duties under this Agreement, and shall perform such duties
diligently, in good faith and in a manner consistent with the best interests of
the Company.
4. Compensation
and Other Benefits.
(a) Initial
Bonus. On the
commencement date of Employee’s employment with the Company, the Company shall
pay to the Employee an initial bonus in the amount of Thirty-Eight Thousand
Eight Hundred Fifty Dollars (US$38,850).
(b) Salary. For his
services to the Company during the Term, the Company also shall pay Employee a
salary (“Salary”) at the
rate of Two Hundred Thousand Dollars ($US200,000) per year. All installments of
Salary shall be paid to the Employee on the Company’s regular payroll dates. As
used in this Agreement, the term “Salary” shall
mean the Salary in effect at the time of the relevant event. The Parent
Company’s President, or Compensation Committee, if a Compensation Committee has
been established, will review the Employees Salary at the end of each fiscal
year, and may increase the Employee’s Salary at their sole
discretion.
(c) Additional
Compensation. In
addition to the Initial Bonus and Salary payable to the Employee, pursuant to
the provisions of subsections
4(a) and 4(b) above,
the Employee shall also be entitled to receive additional compensation hereunder
(the “Profit
Bonus”) equal
to ten percent (10%) of the Company’s net earnings after payment of interest,
but before the payment of taxes (“Net
Earnings”), as
determined by the Company’s independent accountants. The Profit Bonus will be
payable only in the case that the company’s performance achieves the agreed
performance budget for that year, as agreed between the Employee and the Parent
Company’s President prior to that fiscal year. Any Profit Bonus payable to the
Employee hereunder shall be determined based on the Company’s Net Earnings for
each fiscal year of the Company, during the Term, and shall be paid to the
Employee within ninety (90) days after the end of each fiscal year for which a
Profit Bonus is payable, in cash, securities of the Company, or a combination of
both, which determination shall be mutually agreed by the Employee and the
Company. In the event that the Employee is not employed by the Company during
the entire fiscal year for which any Profit Bonus is computed, such Profit Bonus
shall be pro rated based on the period of the Employee’s employment during such
fiscal year, and shall take in to account the agreed budget for that same
period.
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(d) Issuance
of shares in the Parent Company.
Effective as of the date of this Agreement, the Employee shall be issued 200,000
ordinary shares in the Parent Company.
(e) Other
Benefits. In
addition to any other compensation set forth herein, Employee shall receive the
following benefits:
(i) health
insurance for the Employee and, to the extent permitted by the Company’s health
insurer, members of his immediate family during the Term of this Agreement;
(ii) the right
to participate in any profit sharing plans, pension plans, stock option and
other stock rights plans, as are made available to the Company’s other executive
employees, as shall be determined in the sole discretion of the Company’s Board
of Managers or Compensation Committee, if applicable;
(iii) payment
of all automobile expenses, including maintenance, insurance and fuel, upon the
same terms as currently provided by the Company; and
(iv) twenty
(20) days of vacation each year; provided that it is within the President’s
discretion whether or not to allow the Employee to take vacation on the dates
requested, based upon the business requirements of the Company. The Employee may
not normally take more than two (2) weeks of vacation between June 1st and
September 30th of each
year, and unused vacation time may not be carried forward to subsequent
years.
(f) Withholding. All
forms of cash compensation referred to in this Agreement are subject to
reduction to reflect applicable withholding and payroll taxes.
5. Reimbursement
of Expenses. The
Company shall reimburse Employee for all expenses properly and reasonably
incurred by Employee in connection with the performance of his services pursuant
to this Agreement.
6. Termination
of Employment.
(a) Death. The
Employee’s employment hereunder shall terminate immediately upon the death of
the Employee. Except for accrued but unpaid Salary payments and any Profit Bonus
due for the period through the date of death, the Company shall have no further
payment or other obligations to the Employee.
(b) Disability. The
Employee’s employment may be terminable by the Employee or the Company by not
less than ten (10) days’ written notice in the event of Employee’s Disability.
The term “Disability” shall
mean any illness, disability or incapacity of the Employee which prevents him
from substantially performing his regular duties for a period of three (3)
consecutive months or six (6) months, even though not consecutive, in any twelve
(12) month period. In addition, Disability shall also be deemed to have occurred
if Employee shall have had appointed a guardian or conservator to preside over
his affairs, or such appointment shall have been made by a court of competent
jurisdiction. The determination of Employee’s “Disability” shall
be made by an examining physician acceptable to the Company and the Employee. If
the Company and the Employee cannot agree as to an acceptable physician or if
the Employee is unable to select a physician, then a physician shall be
designated by the American Arbitration Association in New York, New York. In the
event of a termination of Employee’s employment as a result of his Disability,
except for accrued but unpaid Salary payments and any Profit Bonus due for the
period through the date of termination, the Company shall have no further
payment or other obligations to the Employee.
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(c) Termination
for Cause. The
Company may terminate Employee’s employment immediately for Cause (as hereunder
defined). The term “Cause” shall
mean (i) Employee’s conviction of a crime (excluding minor traffic
violations); (ii) gross negligence or willful misconduct of Employee in
connection with his duties hereunder; (iii) the determination by any
regulatory or judicial authority that Employee violated, before or after the
date hereof, any law, any rule or regulation adopted thereunder relating to the
operation of the Company; (iv) the consistent failure by Employee to
perform his duties hereunder or follow the directives, orders or instructions of
the Company’s Board of Managers; or (v) any determination by the Board of
Managers that the Employee conducted any type of fraud or other behavior not
reflecting positively on the Company. In the event of a termination for Cause,
the Company shall have no payment obligations to Employee except for accrued but
unpaid Salary payments and any Profit Bonus due for the period through the date
of termination, the Company shall have no further payment or other obligations
to the Employee.
(d) Termination
without Cause.
Notwithstanding anything to the contrary contained in this Agreement, the
Company may terminate the employment of the Employee hereunder, without Cause,
by providing Employee with twelve (12) months prior written notice of such
termination of employment. Upon termination of his employment, Company shall pay
to Employee any accrued but unpaid Salary through the date of such termination.
Furthermore, the Company shall also pay to the Employee, at the time set forth
in subsection
4(c), any
Profit Bonus due and payable to him with respect to the fiscal year in which his
employment was terminated without Cause.
7. Trade
Secrets and Proprietary Information.
Employee recognizes and acknowledges that the Company, through the expenditure
of considerable time and money, has developed and will continue to develop
information concerning customers, clients, marketing, products, services,
business, research and development activities and operational methods of the
Company and its customers or clients, contracts, financial or other data,
technical data or any other confidential or proprietary information possessed,
owned or used by the Company, the disclosure of which could or does have a
material adverse effect on the Company, its business, any business it proposes
to engage in, its operations, or financial condition and that the same are
confidential and proprietary and considered “confidential
information” of the
Company for the purposes of this Agreement. In partial consideration of his
employment, Employee agrees that he will not, without the consent of the Board
of Managers of the Company make any disclosure of confidential information now
or hereafter possessed by the Company, to any person, partnership, corporation
or entity either during or after the term hereof, except to officers, managers,
employees and consultants of the Company or its subsidiaries or affiliates and
to others within or without the Company as the Employee may deem necessary in
order to perform Employee’s services hereunder, and except as may be required
pursuant to any court order, judgment or decision from any court of competent
jurisdiction; provided,
however,
Employee shall give the Company immediate notice as to any such legal proceeding
or process. The foregoing shall not apply to information which is in the public
domain on the date hereof; which, after it is disclosed to Employee by the
Company, is published or becomes part of the public domain through no fault of
Employee; which is known to Employee prior to disclosure thereof to him by the
Company, provided he obtained it from a source not bound by a confidentiality
agreement with or confidentiality obligation to the Company, after Employee is
no longer employed by the Company, which is thereafter disclosed to Employee in
good faith by a third party which is not under any obligation of confidence or
secrecy to the Company with respect to such information at the time of
disclosure to him. For purposes solely of this Section
7 the term
“Company” shall
include the Company, its parent, its subsidiaries and affiliates.
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8. Covenant
Not To Solicit. Except
in the ordinary course of his duties hereunder, or in the furtherance of the
business of the Company, during the period from the date of this Agreement until
two (2) years following the date on which Employee’s employment hereunder is
terminated for any reason or no reason, Employee will not, directly or
indirectly:
(a) persuade
or attempt to persuade any person or entity which is or was a customer, client
or supplier of the Company to cease doing business with the Company, or to
reduce the amount of business it does with the Company;
(b) solicit
for himself or any other person or entity other than the Company the business of
any person or entity which is a customer or client of the Company, or was a
customer or client of the Company within two (2) years prior to the termination
of his employment; or
(c) persuade
or attempt to persuade any employee of the Company, or any individual who was an
employee of the Company during the one (1) year period prior to the lawful and
proper termination of this Agreement, to leave the Company’s employ, or to
become employed by any person or entity other than the Company.
9. Covenant
Not To Compete. Except
in the ordinary course of his duties hereunder, or in the furtherance of the
business of the Company, during the period from the date of this Agreement until
one (1) year following the date on which Employee’s employment hereunder is
terminated for any reason or no reason, Employee will not, directly or
indirectly engage in any business in the United States whether as an officer,
director, consultant, partner, guarantor, principal, agent, employee, advisor or
in any manner, in a Competitive Business. For the purpose of this Section
9,
“Competitive
Business” shall
mean any business engaged in logistics and/or freight forwarding.
10. Enforceability
and/or Modification of Restrictive Covenants.
Employee acknowledges that the restrictive covenants (the “Restrictive
Covenants”)
contained in Sections 7,
8 and 9 of this
Agreement are a condition of his employment and are reasonable and valid in
geographical and temporal scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part of any of the
Restrictive Covenants, is invalid or unenforceable, the remainder of the
Restrictive Covenants and parts thereof shall not thereby be affected and shall
remain in full force and effect, without regard to the invalid portion. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable because of the geographic or temporal scope of such
provision, such court shall have the power to reduce the geographic or temporal
scope of such provision, as the case may be, and, in its reduced form, such
provision shall then be enforceable.
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11. Injunctive
Relief.
Employee agrees that his violation of or notice to the Company of his intention
to violate any of the provisions of Sections 7,
8 or 9 of this
Agreement shall cause immediate and irreparable harm to the Company. In the
event of any breach of or notice of intention to breach any of said provisions,
Employee consents to the entry of preliminary and permanent injunctions by a
court of competent jurisdiction prohibiting Employee from any violation or
threatened violation of such provisions and compelling Employee to comply with
such provisions. This Section
11 shall
not affect or limit, and the injunctive relief provided in this Section
11 shall be
in addition to, any other remedies available to the Company at law or in equity
or in arbitration for any such violation by Employee.
12. Miscellaneous.
(a) Notices. Any
notice, consent or communication required under the provisions of this Agreement
shall be given in writing and sent or delivered by hand, overnight courier or
messenger service, against a signed receipt or acknowledgment of receipt, or by
registered or certified mail, return receipt requested, to the parties at their
respective addresses set forth at the beginning of this Agreement with notice to
the Company being sent to the attention of the individual who executed this
Agreement on behalf of the Company. Either party may, by like notice, change the
person, address or telecopier number to which notice is to be sent.
(b) Governing
Law; Jurisdiction. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without regard to the conflicts of laws principles
thereof. The parties hereto hereby irrevocably agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this Agreement, shall be
brought solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the parties hereby covenant and
irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in
personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of its reasonable counsel fees and disbursements in an amount
judicially determined.
(c) Severability. If any
term, covenant or condition of this Agreement or the application thereof to any
party or circumstance shall, to any extent, be determined to be invalid or
unenforceable, the remainder of this Agreement, or the application of such term,
covenant or condition to parties or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
term, covenant or condition of this Agreement shall be valid and be enforced to
the fullest extent permitted by law, and any court or arbitrator having
jurisdiction may reduce the scope of any provision of this Agreement, including
any geographic and temporal restrictions set forth in Sections
8 and 9 of this
Agreement, so that it complies with applicable law.
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(d) Entire
Agreement. This
Agreement constitutes the entire agreement of the Company and Employee as to the
subject matter hereof, superseding all prior written or prior contemporaneous or
oral understandings, agreements and/or contracts, including any previous
employment agreements, or understandings with respect to the subject matter
covered in this Agreement. Any such prior understanding, agreements and/or
contracts are hereby expressly and irrevocably deemed null and void and of no
further force or effect. This Agreement may not be modified or amended, nor may
any right be waived, except by a writing which expressly refers to this
Agreement, states that it is intended to be a modification, amendment or waiver
and is signed by both parties in the case of a modification or amendment or by
the party granting the waiver. No course of conduct or dealing between the
parties and no custom or trade usage shall be relied upon to vary the terms of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(e) Assignment. Except
as specifically set forth in this Agreement, neither the Company nor the
Employee shall have the right to assign or transfer any of its or his rights or
obligations hereunder without the prior written consent of the other party;
provided, however, that the Company may assign this Agreement to any subsidiary
or affiliate of the Company or to any entity that is a successor
business.
(f) Successors
and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors, executors, administrators and permitted
assigns.
(g) Waiver. No
delay or omission to exercise any right, power or remedy accruing to either
party hereto shall impair any such right, power or remedy or shall be construed
to be a waiver of or an acquiescence to any breach hereof. No waiver of any
breach hereof shall be deemed to be a waiver of any other breach hereof
theretofore or thereafter occurring. Any waiver of any provision hereof shall be
effective only to the extent specifically set forth in an applicable writing.
All remedies afforded to either party under this Agreement, by law or otherwise,
shall be cumulative and not alternative and shall not preclude assertion by such
party of any other rights or the seeking of any other rights or remedies against
any other party.
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IN
WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above
written.
| XXX X’XXXXX (USA) LLC | ||
| |
|
|
| By: | /s/ Xxxxxxxxxxx Xxxx | |
|
Name:
Xxxxxxxxxxx Xxxx
Title:
Manager
Xxx X’Xxxxx (USA) LLC | ||
| EMPLOYEE: | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxx | |
|
Xxxxxxx Xxxxx | ||
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